The 1945-64 period is known for its multiparty democratic politics,
and four presidents were elected freely in 1945, 1950, 1955, and 1960.
In the early 1960s, an explosive combination of slower economic growth,
rising inflation, populism, and nationalism produced political
instability and popular discontent. The major political parties lost
their hegemony, and labor unions accumulated great political influence
over the government of João Goulart (president, 1961-64).

The military seized power in April 1964 and began twenty-one years of
rule. Under its model of "relative democracy," Congress
remained open, but with greatly reduced powers. Regular elections were
held for Congress, state assemblies, and local offices. However,
presidential, gubernatorial, and some mayoral elections became indirect.
Political parties were allowed to operate, but with two forced
realignments. These were the replacement of the old multiparty system
with a two-party system in 1965 and a system of moderate pluralism, with
six (and later five) parties in 1980. The military regime employed
massive repression from 1969 through 1974.

After the "economic miracle" period (1967-74), Brazil
entered a "stagflation" phase concurrent with political
liberalization. During the military period, Brazilian society had become
70 percent urban; the economy had become industrialized, and more
manufactured goods than primary goods were exported; and about 55
percent of the population had registered to vote. Foreign policy
oscillated between alignment with the United States and pragmatic
independence. A transition to a civilian president took place in 1985.
From 1985 to 1997, Brazil experienced four distinct political models: a
return to the pre-1964 tradition of political bargaining, clientelism
(see Glossary), and economic nationalism under José Sarney (president,
1985-90); neosocial liberalism with economic modernization under
Fernando Collor de Mello (president, 1990-92); an erratic personal style
of social nationalism under Itamar Franco (president, 1992-94); and a
consensus-style social-democratic and neoliberal coalition under
Fernando Henrique Cardoso (president, 1995- ).

Under heavy accusations of corruption, President Collor was impeached
in 1992. His vice president, Franco, used a pragmatic policy of
"muddling through," but in mid-1994 achieved great popularity
with the Real Plan (for value of the real (R$)--see
Glossary), a stabilization program authored by then Minister of Finance
Cardoso. In the 1994 election, Cardoso and the Brazilian Social
Democracy Party (Partido da Social Democracia Brasileira--PSDB)
expounded a social-democratic model of modernization, while Luis Inácio
"Lula" da Silva of the Workers' Party (Partido dos
Trabalhadores--PT) supported a reworked model of corporatist or
syndicalist socialism. The Real Plan was instrumental in the
election of Cardoso as president.

Cardoso was inaugurated as president on January 1, 1995. The
transition to the new government was nearly perfect. Cardoso had won an
outright victory in the first-round election. He had potentially strong
support blocs in the Chamber of Deputies (Câmara dos Deputados) and
Federal Senate (Senado Federal; hereafter, Senate). He had strong
support from a majority of the newly elected governors, including those
from the important states of Minas Gerais, São Paulo, and Rio de
Janeiro, which elected governors from the president's own PSDB.
Moreover, the December 1994 inflation rate was less than 1 percent;
unemployment was low; and popular expectations were extremely high.

Perhaps the most important task of the Cardoso government in 1995 was
to promote the reform of key sections of the 1988 constitution in order
to reduce the role of the state in the economy, reform the federal
bureaucracy, reorganize the social security system, rework federalist
relationships, overhaul the complicated tax system, and effect electoral
and party reforms to strengthen the representation of political parties.
The new Cardoso government initiated constitutional reform (which
requires a three-fifths majority of each house), but soon met with stiff
congressional resistance. Because of the 1996 municipal elections and
other political impediments, the other reforms--administrative, social
security, and fiscal--were stalled in Congress, awaiting passage in
1997.

Brazil - Political Culture

Many aspects of Brazil's political system may be explained by its
political culture (see Glossary), the origins of which may be found in
traditional rural society during the colonial and independence periods
through 1930. This political culture evolved into three styles of
politics. Under the more traditional style of politics, coronelismo,
the local coronel (colonel), in alliance with other large
farmers, controlled the votes of rural workers and their families. The
local political chiefs in turn exchanged votes with politicians at the
state level in return for political appointments and public works in
their municipalities (municípios ).

As rural-urban migration increased after 1930, a transitional style
of clientelistic politics emerged in medium-size and large-size cities.
Under this system, neighborhood representatives of urban politicians
would help recent migrants resolve their problems in exchange for votes.
These representatives were usually from "clientele
professions," such as medical doctors, dentists, and pharmacists.

The third style of mass politics involved a direct populist appeal to
the voter by the politician, without formal intermediation by
clientelism or domination by coronelismo . Research in the
early 1990s revealed that in most cases voter decision making has been
influenced by a mixture of the second and third styles, as well as by
peer groups, opinion leaders, and television soap operas (telenovelas
).

Polling results since the early 1970s have revealed changing public
opinion concerning the relative merits of military government versus
democracy. For example, the proportion of Brazilians favorable to
military government decreased from 79 percent in 1972 to 36 percent in
1990. Moreover, 70 percent of Brazilians agreed in 1990 that the
government should not use troops against striking workers, as compared
with only 7 percent in 1972. In a March 1995 poll conducted by the
Datafolha agency, however, only 46 percent of Brazilians responded that
"democracy is always preferred over dictatorship," as compared
with 59 percent endorsing the same proposition in March 1993. The
relatively low crime rates during the military period may be a factor in
the shift in public opinion regarding democracy.

Brazil has a diversity of regional political cultures. Politics in
the states of the Northeast (Nordeste) and North (Norte) are much more
dependent on political benevolence from Brasília than are the states of
the South (Sul) and Southeast (Sudeste). Because Brazil's southernmost
state, Rio Grande do Sul, suffered three civil wars and was involved
frequently in political conflicts in the Río de la Plata areas, its
population holds strong political loyalties. As a result, the Liberal
Front Party (Partido da Frente Liberal--PFL) and the PSDB have very
limited penetration in Rio Grande do Sul. Both parties are considered
traitors: the PFL had splintered from the military regime's Democratic
Social Party (Partido Democrático Social--PDS) in 1984, and the PSDB
had broken from the Brazilian Democratic Movement Party (Partido do
Movimento Democrático Brasileiro--PMDB) in 1988.

In the Southeast state of Minas Gerais, politics is conducted in a
very cautious, calculated manner. Politicians there are known for their
ability to negotiate and cut bargains, and they have political
"adversaries" rather than enemies. In the western frontier
states, politics is constantly evolving, because of the continuous
inward migration from other regions. Most politicians and voters are
newcomers with no local political roots or traditions.

The Southeast states of Rio de Janeiro and São Paulo have received
large influxes of rural-urban and north-south migration since the 1950s.
Because of higher levels of industrialization, per capita income, labor
union membership, and education, the level of political consciousness is
higher in these states than in those to the north and west.

As a result of intense rural-urban migration since 1960, urban voters
have increased from fewer than 30 percent to more than 70 percent of the
population in 1994. In 1960 only 22 percent (15.5 million) of Brazil's
population was registered to vote; by 1994 more than 60 percent (nearly
95 million) of the population was enfranchised. The new migrants to
urban areas quickly enhanced their political consciousness through
television, increased schooling, and membership in new associations,
such as labor unions.

Despite opposition from a minority, the PMDB nominated former São
Paulo governor Orestes Quêrcia as its presidential candidate. The PDT
again nominated Leonel Brizola. Lula's Workers' Party articulated a
broad coalition on the left, including the Brazilian Socialist Party
(Partido Socialista Brasileiro--PSB), Popular Socialist Party (Partido
Popular Socialista--PPS), PC do B (Communist Party of Brazil), and Green
Party (Partido Verde--PV). However, Marxist wings of the Workers' Party,
having gained control of the party's Executive Committee, imposed a
difficult, radical platform on the campaign.

Cardoso had become minister of finance in May 1993 and had assembled
the same PSDB economic team that had formulated the Cruzado Plan in
1986. This time, however, the team put together a stabilization plan
that included the components missing in 1986. The hope was that the
initiative would boost Cardoso's potential candidacy into the second
round. In February 1994, Congress approved the Real Value Units
(Unidades Reais de Valor--URVs; see real (R$) in Glossary)
Stabilization Plan, which gave the minister of finance almost absolute
power to impound or reallocate budgeted funds, reduce the fiscal
deficit, and conduct a rescheduling of the foreign debt.

The impact of the Real Plan on the preference polls was even
more dramatic than PSDB strategists had imagined. They had thought that,
at best, if the plan were a success, Cardoso might pull even with Lula
by the end of August, thus guaranteeing a second round in November.
However, Cardoso surpassed Lula in the Datafolha firm's presidential
preference poll results at the end of July by successfully branding the
Workers' Party as against the Real Plan and for inflation.
Cardoso went on to win the election outright on the first round with
54.3 percent of the valid votes cast (44.1 percent of the total vote,
including blank and null ballots) (see table 25, Appendix). Lula placed
second with 27.0 percent. Cardoso's PSDB-PFL-PTB coalition received
additional support from the PMDB and PPR, which abandoned their
candidates and climbed aboard the Cardoso bandwagon. In addition to
electing the president and a majority of the governors, the Center
coalition returned substantial majorities to Congress.

The social-liberal alliance, the Big Center, that elected Cardoso on
the first round enjoyed only moderate presidential coattails at the
state level (see table 26, Appendix). The PSDB-PFL-PTB alliance elected
nine (33 percent) governors, twenty-four of fifty-four (44 percent)
senators up for election, 182 of 513 (35 percent) federal deputies, and
324 of 1,045 (31 percent) state deputies. Cardoso placed first in every
state except the Federal District (Brasília) and Rio Grande do Sul.
Lula surpassed Cardoso in the Federal District and Rio Grande do Sul,
where his coattails pulled the Workers' Party gubernatorial candidates
into the second round.

The 1994 gubernatorial election was the fourth in a series of direct
elections for governor since their reinstatement in 1982. Compared with
1990, the PSDB had the best performance of all parties in 1994. The PSDB
was formed hastily in June 1988, and in 1990 elected only one governor
(Ceará). In 1994 the PSDB won six governorships, including Minas
Gerais, São Paulo, and Rio de Janeiro. These three states account for
nearly 60 percent of Brazil's gross national product (GNP--see Glossary)
and tax base. Certainly, presidential coattails and the Real
Plan were important factors in these three second-round victories.
Brizola's PDT lost the three states won in 1990, but in 1994 elected the
governors of Paraná (Jaime Lerner) and Mato Grosso (Dante de Oliveira),
both on the first round. The Workers' Party made it into the second
round in three states and won in two: Brasília and Espírito Santo. The
two victories gave the Workers' Party a chance to demonstrate how it
would manage a state government. The party had already elected mayors in
major cities (São Paulo, Porto Alegre, and Belo Horizonte) in 1988 and
1992.

Of the fifty-four Senate seats up for election in 1994, only nine
incumbents were reelected. Six of the twenty-seven senators elected in
1990 were replaced by their respective alternates (five were elected to
other offices and one died). Thus, in 1995 fifty-one of the eighty-one
senators were new, although five of the latter had served in the Senate
before 1990. The PMDB, PFL, and PSDB continued to have the largest
upper-house delegations; and the PFL made substantial gains (see table
27, Appendix). The most significant change was the advance of the left.
From only two senators in 1991, this group increased to seven (five from
the Workers' Party). The PPS, the former PCB (Brazilian Communist
Party), elected its first senator (Roberto Freire) since Luís Carlos
Prestes was elected in 1945.

The Chamber of Deputies was enlarged in 1995 with the expansion of
the São Paulo State delegation from sixty to seventy as mandated by the
1988 constitution. Turnover in the lower house in 1995 (275 new deputies
out of 513, or 53.6 percent) was slightly lower than that in 1991. As in
1991, the Chamber of Deputies in 1995 continued to have two larger
parties (PMDB and PFL) and six middle-sized parties. By electing
deputies in all five regions of Brazil, these eight parties, as well as
the PC do B, have a more national representation.

Voter turnout was lower in 1994 (82.2 percent) than in 1989 (88.1
percent), and blank and null votes were more frequent in 1994 than in
1989. These differences may have resulted in part from the fact that the
1994 election was more complicated, with two ballots and six offices.

Three basic styles of lobbying are found in Brasília: the interest
group sends its own representatives to Brasília, when the legislative
agenda warrants; the interest group has its own representatives
permanently installed in Brasília; or the group contracts with
lobbyists in Brasília to represent its interests. Professional
lobbyists systematically monitor the activities of Congress and the
executive branch regarding legislative agendas and procedures. Visits by
groups and individual interests to strategic members of Congress are
organized frequently. In some cases, the deputies' geographical vote
profiles for the last election within their state are analyzed for the
client. When the interest group has a large membership, bus caravans to
Brasília are organized to pressure Congress or the executive branch.

As in many legislatures, the Brazilian Congress also has inside
lobbyists; that is, Chamber of Deputies or Senate staff, and some
members themselves (the so-called single-issue deputy or senator).
Because staff are very important to the legislative process, they are
cultivated assiduously by lobbyists, and many become sensitive to (or
eventually agents for) certain interest groups. In response to these
pressures, the Chamber of Deputies Research Staff Association began
preparing a Code of Ethics in 1993.

Campaign contributions are local and are an integral part of the
lobbying process. The Ministry of Finance issues electoral bonus
receipts for campaign contributions. Many contributing businesses,
however, have used these receipts to evade taxes by providing
documentation for their bogus records, known as their caixadois
(second set of books). Several bills have been introduced to address
this problem, but no legislation had been passed by early 1997. The
Chamber of Deputies allows groups to receive lobbying credentials. In
the 1991-92 session, thirty-nine groups (twenty-eight business groups)
received credentials, in addition to all ministries and sixteen other
public-sector agencies. The Senate does not offer credentials.

In 1993, 333 daily newspapers had a total circulation of about 2.5
million. Magazines sold 222 million copies in 1993 (1.47 per
inhabitant), down 32 percent from 1991. Although per capita newspaper
circulation and readership is very low in Brazil, research has shown
that print media have considerable influence on politics because of very
competent investigative reporting and exposés, influence among
"opinion leaders," and influence on other media. Of the five
national newspapers--O Estado de São Paulo , Folha de São
Paulo , Gazeta Mercantil , O Globo , and Jornal
do Brasil --members of Congress regarded Gazeta Mercantil
as the least biased paper, according to a May 1995 survey.

Radio and especially television exert a tremendous direct influence
over the voting behavior of the vast majority of Brazilians. When the
TSE (Superior Electoral Court) completed a massive computerized voter
registration before the 1986 elections, it classified 70 percent of
those registered as "illiterate or semi-illiterate." Brazilian
television has an insidious influence on these nearly 60 million voters.
Political subplots are cleverly woven into television soap operas (telenovelas
) and situation comedies to jaundice public opinion about certain
political groups and types of politicians. Biased news coverage of
political campaigns is commonplace.

Brazil was a founding member of the League of Nations (see Glossary)
in 1920 and the UN in 1945, and has chaired the UN Security Council on
several occasions. Brazil is also an active participant in the
Organization of American States (OAS; see Glossary), IMF, World Bank
(see Glossary), Inter-American Development Bank (IADB; see Glossary),
African Development Bank (ADB), World Trade Organization (WTO, which now
administers the General Agreement on Tariffs and Trade--GATT; see
Glossary), International Commodity Organization (coffee, cocoa beans),
and Antarctic Treaty. International pressures have been strong on Brazil
to join certain agreements, such as the Non-Proliferation Treaty (NPT),
which Brazil announced its decision to sign on June 20, 1997. Brazil
joined the Missile Technology Control Regime (MTCR--see Glossary) in
October 1995.

Brazil has participated in UN peacekeeping operations since the Suez
Crisis in 1956. A Brazilian contingent participated in the UN observer
force that guaranteed the October 1994 elections in Mozambique, and in
the UN observer force in Bosnia in 1995. Regarding the latter, a
Brazilian general commanded a force of 680 observers, of whom
thirty-four were Brazilians. In May 1995, two Brazilian officers were
among the several hundred UN observers captured by the Bosnian Serbs and
used as human shields against further NATO bombings. The number of
Brazilian personnel attached to UN peacekeeping operations has gradually
declined from 1,166 in August 1996 to forty-eight in September 1997.
Because of its active participation in UN activities and its status as a
middle-level emerging economic and political power, Brazil aspires to a
permanent seat on the Security Council, if and when membership in this
body is expanded.

The Treaty of Asunción--signed in 1991 by Brazil, Argentina,
Uruguay, and Paraguay--was the culmination of a rapprochement between
Brazil and Argentina after 160 years of regional rivalry (see Trade
Patterns and Regional Economic Integration, ch. 3). It also incorporated
Uruguay and Paraguay into Mercosul, and Bolivia and Chile joined
Mercosul in 1996.

The Iraq-Kuwait conflict, which resulted in Operation Desert Storm in
early 1991, placed Brazil in a very delicate position. United States
congressional subcommittees accused Brazil of exporting technology and
expertise to Iraq to develop a missile based on the Piranha missile
(MAA-1). Retired Air Force Brigadier Hugo Oliveira Piva had taken a
private group of Brazilian technicians to Baghdad to complete this
project; under pressure, the Collor government ordered the group's
return to Brazil.

At the time of Desert Storm, a Brazilian construction company, Mendes
Júnior, had several hundred workers and technicians, as well as several
million dollars worth of equipment, in southern Iraq working on railroad
and irrigation projects. Thus, Brazil, unlike Argentina, did not
participate in the Allied operation. The Brazilian government had to
dispatch its key negotiator, Ambassador Paulo de Tarso Flecha de Lima,
from his post in London to negotiate the release of the Mendes Júnior
personnel from Iraq and the disposition of the equipment. Brazil had won
a US$5 billion price and performance competition to supply its Osório
tank to Saudi Arabia in 1990, but the Kuwait conflict changed the
decision in favor of the United States Abrams tank.

President Kubitschek (1956-61) improved relations with the United
States, while strengthening relations with Latin America and Europe, and
exploring market possibilities in Eastern Europe. His industrial
development policy attracted huge direct investments by foreign capital,
much from the United States. He proposed an ambitious plan for United
States development aid to Latin America in 1958 (Operation Panamerica).
The outgoing administration of President Dwight D. Eisenhower found the
plan of no interest, but the administration of President John F. Kennedy
appropriated funds in 1961 for the Alliance for Progress (see Glossary).

Relations again cooled slightly after President Quadros announced his
new independent foreign policy in January 1961. Quadros also made
overtures to Cuba and decorated Cuban revolutionary Ernesto
"Che" Guevara with Brazil's highest honor.

Severe economic problems, political and economic nationalism, union
populism, and strained relations with the United States frustrated
President Goulart, eventually causing his overthrow in 1964. Before
assuming the presidency, Goulart was known for having been a Vargas protégé
and for being pro-Fidel Castro, procommunist, and antiforeign capital.
However, during the first parliamentary period (September 1961 to
February 1963) of his presidency, Goulart tried to maintain close
relations with the United States by naming strongly pro-United States
Roberto Campos as ambassador in Washington and Deputy Santiago Dantas as
minister of foreign affairs. Nonetheless, certain domestic and foreign
policy issues clouded this relationship. First, Goulart's
brother-in-law, Leonel Brizola, then governor of Rio Grande do Sul,
insisted on expropriation of foreign-owned public utilities (electric
power and telephones), and nationalists in Congress pushed for zero or
minimum compensation. Second, Brazil joined Argentina, Bolivia, Chile,
Ecuador, and Mexico in abstaining from a final vote on an OAS resolution
expelling Cuba from that organization. Third, in August 1962, Congress
approved a more restrictive law governing profit remittances, and new
foreign investments dwindled to almost zero in early 1964.

In late 1963, Washington, alarmed that Brazil might become a hostile,
nonaligned power like Egypt, reduced foreign aid to Brazil. The exact
United States role in the March 31, 1964, military coup that overthrew
Goulart remains controversial. However, the United States immediately
recognized the new interim government (before Goulart had even fled
Brazilian territory); a United States naval task force anchored close to
the port of Vitória; the United States made an immediate large loan to
the new Castelo Branco government (1964-67); and the new military
president adopted a policy of total alignment with the United States.

The Castelo Branco regime broke off relations with Cuba (while
enhancing them with the Soviet Union and Eastern Europe); purged or
exiled leftists and alleged communists; adopted a more discreet position
in the UN vis-à-vis Portuguese colonialism; duly compensated
expropriated foreign capital investments; passed a new profit
remittances law; and sent a 1,200-man battalion as part of the
Interamerican Peace Force to the Dominican Republic in 1965. Brazilian
foreign policy centered on combating subversion and contributing to the
collective security of the hemisphere. Brazil ranked third after Vietnam
and India as recipients of United States aid; it received US$2 billion
from 1964 to 1970. Nonetheless, Castelo Branco's all-out support for
United States policies only served to increase anti-Americanism rather
than to lessen it.

Divergence and some hostility characterized relations during the
Costa e Silva period (1967-69). Brazil perceived that United States
leadership in the global struggle was faltering because of the winding
down in Vietnam, making it more difficult for Brazil to support United
States positions in world forums. In 1969 the Richard M. Nixon
administration assumed a low-profile policy with Latin America.
Washington provided less economic aid and fewer arms shipments to Brazil
and sharply reduced its military mission in Brazil (from 200 in 1968 to
sixty in 1971).

Although Costa e Silva did not turn to economic nationalism and the
climate for foreign investments remained generally favorable, Brazil
asserted its independence in other ways. It withdrew support from the
Interamerican Peace Force, declined to sign the NPT (Non-Proliferation
Treaty), tried to organize a Latin American nuclear community, assumed a
leadership role in the nonaligned G-77, and increased Soviet-Brazilian
trade. Nevertheless, Costa e Silva paid a state visit to Washington in
1967, and in 1969 Brazil sided with the United States against the
nationalization of oil properties by the Peruvian military government.

The Médici and Geisel governments (1969-79) generally followed the
same course of increasingly independent foreign policy combined with
friendly relations with the United States. Brazil sought to pursue its
own advantages by leaving open its nuclear options, greatly expanding
trade with the Eastern Bloc, recognizing the Beijing government four
years before the United States normalized relations with mainland China,
and asserting a 322-kilometer maritime zone (always referred to by
Brazilians as "200 miles") contrary to United States policy
and fishing interests.

Brazil's policies emphasized North-South issues over the East-West
conflict. Brazil took the lead in organizing commodity cartels (coffee,
sugar, and cocoa). In 1975 Brazil voted for the UN resolution equating
Zionism with racism and did not condemn the Soviet and Cuban
intervention in Angola.

The Nixon administration remained basically sympathetic to Brazilian
hopes for growth and world power status, and considered Brazil to be one
of the developing world nations most sympathetic to the United States.
In February 1976, Secretary of State Henry Kissinger and Minister of
Foreign Affairs Antônio Azeredo da Silveira signed a memorandum of
understanding that the two powers would consult on all issues of mutual
concern and would hold semiannual meetings of foreign ministers. Brazil
had signed similar agreements with Britain, France, and Italy in 1975.
Only Brazil and Saudi Arabia, aside from the major Western allies, had
such an agreement with the United States. Although these agreements had
no great practical consequences, they indicated a changed United States
policy of wooing Brazil.

The Carter administration marked a definite cooling of United
States-Brazil relations. The confrontation involved two very sensitive
issues--human rights and nuclear proliferation. In 1967 Brazil had
signed a contract with Westinghouse to build a 626-megawatt nuclear
power station at Angra dos Reis, Rio de Janeiro State, to be completed
in 1977. In 1973-74 the petroleum crisis jolted Brazil into a
high-priority policy of seeking alternative energy sources (hydro,
solar, alcohol, biogas, Bolivian natural gas, and nuclear). However, the
United States Nuclear Regulatory Commission renounced its guarantee of
delivery of enriched uranium, casting doubts on the value of nuclear
cooperation with the United States, which had prohibited Westinghouse
from constructing enrichment and reprocessing plants in Brazil.

Brazil, desiring independent control of the full cycle from ore to
kilowatts, signed a broad nuclear agreement with West Germany in June
1975. It involved furnishing technology and equipment for eight nuclear
power plants, plus enrichment and reprocessing facilities. Despite
safeguard provisions, some thought this agreement opened the door for
Brazil to construct nuclear weapons, if desired. The Ford administration
reacted only mildly to the agreement, but from his first day in office,
President Carter sought to prevent its implementation.

In 1975 the United States Congress mandated that the Department of
State produce a general report on human rights performance by all
recipients of United States military assistance. The section of the
report dealing with Brazil noted some improvements and described
violations as mildly as possible. This report might have gone unnoticed
if the United States Embassy had not delivered a copy to the Foreign
Office in Brasília just hours before its release in Washington. This
gesture, intended as a courtesy, was interpreted as an intolerable
interference in Brazil's internal affairs. The next day, Brazil
renounced the United States-Brazil Military Assistance Agreement, which
had been in effect since 1952, and some military nationalists pushed for
breaking diplomatic relations. Formal relations between the two military
organizations have still not been reestablished.

The Reagan administration made ostensible gestures to improve
relations with Brazil. A former military attaché to Brazil during the
1964 coup, retired General Vernon Walters was dispatched to Brasília to
express United States concern over the Cuban-supported guerrilla
movement in El Salvador and to request support and assistance. Brazil
listened politely, but then refused to join the military governments of
Argentina, Uruguay, and Chile in support of the Salvadoran government.
Moreover, it increased trade credits to Nicaragua and signed several
large trade agreements with the Soviet Union.

In the early 1980s, tension in United States-Brazil relations
centered on economic questions. Retaliation for unfair trade practices
loomed on the horizon and threatened Brazilian exports of steel, orange
juice, commuter aircraft, frozen chickens, shoes, and textiles. The
United States criticized Brazil for its trade restrictions and unfair
practices (in the area of pharmaceutical patents and restrictions on
United States computer giants), and for its US$5 billion trade surplus
with the United States. Brazil replied that it needed desperately to
maintain large balance of payments surpluses to meet its foreign debt
obligations.

When President Sarney took office in March 1985, political issues,
such as Brazil's arms exports to Libya and Iran, again surfaced.
Brazil's foreign debt moratorium and its refusal to sign the NPT caused
the United States Congress to put Brazil on its mandated blacklist,
thereby restricting Brazil's access to certain United States
technologies (see Nuclear Programs, ch. 6). On taking office in March
1990, President Collor sought a quick rapprochement with the United
States in order to begin an aggressive policy of inserting Brazil into
the world economy and placing it at the negotiating table of world
powers. Collor concluded a nonproliferation agreement with Argentina,
which was registered with the International Atomic Energy Agency in
Vienna. He moved to deactivate Brazil's autonomous nuclear project and
the nuclear submarine project, as well as the air-to-air Piranha missile
project. He also gained congressional approval for eliminating the
market reserve on computer products and beginning tariff reductions.
Collor abolished the National Intelligence Service (Serviço Nacional de
Informações--SNI) and the National Security Council (CSN), and
fashioned a Strategic Affairs Secretariat (Secretaria de Assuntos Estratégicos--SAE)
with a civilian head. However, after a year in office the Collor
government concluded that these overtures had been in vain. Reciprocity
by the United States was not forthcoming, and Brazilian policies
reverted to a more pragmatic, independent approach.

The Franco administration maintained an even more independent stance
and reacted coolly to proposals by the Clinton administration for a
Latin American free-trade zone. Brazil pushed ahead with its Satellite
Launch Vehicle (Veículo Lançador de Satélite--VLS) program, based in
Alcântara, Maranhão. Because Brazil wants to participate in the very
lucrative satellite launching market, it had consistently refused, until
October 1995, to sign the MTCR (Missile Technology Control Regime),
which it believed restricted developing nations from attaining access to
this technology. In June 1995, the Israeli military attaché in Brasília
denounced Brazil for continuing sales of Astros II surface-to-surface
missile launchers and heavy bombs to Libya, despite UN embargoes. In
October 1995, after continuous pressure from the United States, Brazil
finally met the conditions to join the MTCR and was accepted as a
member. Brazil joined the MTCR because it was necessary to gain access
to crucial rocket technology to finalize the VLS IV and to ensure that
it would become operational in 1997.

Relations with the Cardoso government in 1995-97 were good. Cardoso
made a very successful trip to Washington and New York in April 1995,
and the Clinton administration was very enthusiastic regarding the
passage of constitutional amendments that open the Brazilian economy to
increased international participation. The United States was especially
pleased with the break-up of state monopolies in the petroleum and
telecommunications sectors. However, the United States called for
increased efforts to stem international drug smuggling across Brazil's
territory from Andean neighbors, and better coordination between the
United States Drug Enforcement Administration (DEA) and Brazilian
authorities. In April 1995, Brasília and Washington signed a new
cooperation agreement.

Related to the problem of surveillance of drug smuggling across the
Amazon region was the controversial Amazon Region Surveillance System
(Sistema de Vigilância da Amazônia--Sivam) contract. In the 1970s and
1980s, Brazil had installed three air surveillance and traffic control
systems in the South (Sul), Southeast, and Northeast, purchased from
Thomson CSF, the French electronics manufacturer. In the 1990s, several
international consortiums, including Thomson CSF, hotly contested the
proposed Sivam contract (worth US$1.5 billion). A timely visit by United
States Secretary of Commerce Ron Brown in June 1994 heavily influenced
the decision, and two days after his departure, the Brazilian government
decided in favor of a consortium led by the American firm Raytheon,
instead of Thomson CSF. United States incentives included very favorable
Export-Import Bank financing and assurance that Raytheon would
participate in the privatization of the Brazilian Aeronautics Company
(Empresa Brasileira Aeronáutica--Embraer), which never happened.

In 1995, before the final signing of the contracts with Raytheon,
Brazil's Congress, under pressure from environmental groups and the
governors of the Amazon region, decided to review the decision process
and contract details. Under intense pressure from the United States
Embassy in Brasília, however, the Brazilian Senate and Chamber of
Deputies finally approved the plan in May 1995, over protests from the
governors from the Amazon region.

In response to United States criticism over its unfair trade
practices and its failure to protect intellectual property rights,
Brazil finally signed a new patent protection law in March 1996. The new
law includes protection for pharmaceutical patents and contains a
"pipeline" mechanism. The United States also looks to Brazil
to fulfill its longstanding commitments to enact legislation on computer
software and semiconductor layout design, and to introduce amendments to
its copyright laws.

CITATION: Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-1999.

Please note: This text comes from the Country Studies Program, formerly the Army Area Handbook Program. The Country Studies Series presents a description and analysis of the historical setting and the social, economic, political, and national security systems and institutions of countries throughout the world.

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